hard · Corporate Credit Analysis fsa
An analyst is evaluating the borrowing base for an Asset-Based Lending (ABL) facility. The borrower has $200 million in gross accounts receivable (AR) and $150 million in gross inventory. AR eligibility is 90% with an 85% advance rate. Inventory eligibility is 80% with a 75% Net Orderly Liquidation Value (NOLV) and a 65% advance rate on NOLV.
If there is a $10 million dilution reserve and a $5 million rent reserve, what is the total availability under a $250 million RCF commitment?
- 226.5 million
- 250.0 million
- 196.5 million
- 211.5 million
Sign up free to see the explanation and track your rank →
More Corporate Credit Analysis fsa practice
- What is the company's Funds From Operations (FFO)?
- If revenue is $500M, variable costs are 60% of revenue, and fixed costs are $100M, what is
- What is the company's Days Sales Outstanding (DSO)?
- What is the company's Free Operating Cash Flow (FOCF)?
- What is the company's Current Ratio?
- What is the most likely credit implication?
- What is its Free Operating Cash Flow (FOCF) conversion rate from EBITDA?
- Which firm exhibits higher quality of earnings?